Both new and used car loans can be smart choices — it depends on your budget, the car you want and your credit profile. Here's a clear comparison.
Interest rates
New car loans usually carry lower interest rates (from ~9.2–9.5%) than used car loans (from ~11%), because a new car is a lower-risk asset for the lender.
Funding and down payment
New cars can be financed up to 90–100% of the on-road price. Used cars are typically funded up to about 85% of the assessed valuation, so plan for a larger down payment.
Eligibility
Used car loans have wider eligibility, including options for lower credit scores through NBFC partners. The car's age and condition also affect approval.
Which should you choose?
- Want the lowest rate and full warranty? A new car loan wins.
- Want more car for your budget? A used car loan stretches further.
- Have a thin or low credit history? Used-car NBFC options are more flexible.